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JAMB Economics 1984 Question 15

Question 15

Theory of Supply

In the above diagram, the supply curve S0S0 shifts to a new position S1S1 to indicate

Diagram for this question
  1. A.a drop in supply
  2. B.a rise in supply
  3. C.a supply-push inflation
  4. D.a stable supply curve
  5. E.an increase in quantity supplied.
Show the answer and explanation

Answer: B (a rise in supply)

Explanation

The whole supply curve moves to the right, so more is offered at every price: an increase in supply.